This week, the climate talks in Copenhagen escalated as leaders from around the world converged on Denmark to try to influence the outcome of the negotiations. However, at the close of the week, it appears as though the talks may not be able to produce any definitive measures.
In notable currency developments, the dollar rallied against the euro as concerns over countries such as Greece and Austria weighed on the value of the European Union's currency. This week also saw the value of the dollar rise to more than 90 yen, continuing an increase away from the year's bottom near 86 yen reached in late November.
ETF investors became so bullish on the U.S. dollar that they forced another halt in the creation of
PowerShares DB U.S. Dollar Bullish Fund
, the second since early November, after inflows caused the fund's assets under management to double since Nov. 30.
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Wall Street was surprised when the U.S. Treasury decided that it did not want to sell its stake in
, meaning that the beleaguered bank will not be getting out from under the government's wing as soon as Citi executives would like.
American markets had another week of small movements as the
, following a minor loss last week, was down about 0.4%. The
was down even further, by roughly 1.4%, while the
made a gain of about 1% on the week.
Here are the ETF winners and losers for the week:
U.S. Natural Gas
iPath Natural Gas ETN
The previous week was cold, and UNG was one of the weekly winners. This week was cold too, and UNG was the winner again. This time there was also help from the inventory report, which showed a drop of 207 billion cubic feet (Bcf) for the week ending Dec. 11. The bulls will need to see temperatures stay low for a while, however, for this move to continue.
First Trust ISE-Revere Natural Gas
iShares Dow Jones U.S. Oil & Gas Exploration & Production
iShares Dow Jones U.S. Oil Equipment
SPDR S&P Oil & Gas Exploration & Production
SPDR S&P Oil & Gas Equipment & Services
made a splash when it made an offer for
, a producer with large natural gas interests. The announcement sent shares of natural gas producers and explorers higher and lifted FCG. ETFs with greater natural gas exposure -- such as IEO, which has a top 10 holding in XTO --saw greater price increases.
Market Vectors Gulf States
WisdomTree Middle East Dividend
Abu Dhabi provided $10 billion to Dubai, and it helped soothe investors' fears. Shares of MES are up 9.1% since bottoming on Dec. 9, while GULF is up 7.2% since November 30. MES bottomed later due to larger direct exposure to the United Arab Emirates, of which Dubai is a member.
iShares MSCI Brazil
iShares S&P Latin America 40
Market Vectors Brazil Small Cap
A stronger U.S. dollar hurt foreign shares in general, but the added effect on commodity prices weighed on Brazilian shares. With 23% of assets in
, EWZ was most affected and underperformed the typically more volatile BRF.
Market Vectors Junior Gold Miners
Market Vectors Gold Miners
iShares Comex Gold
fell 0.3% for the week as gold prices succumbed to the stronger U.S. dollar. With the U.S. dollar offering safe-haven status from European troubles this week, some investors who might have bought gold may be sticking with the greenback.
Claymore/AlphaShares China Real Estate
iShares FTSE/Xinhua China 25
Claymore/AlphaShares China Small Cap
Investors worried that some new regulations on the Chinese housing sector would impact the industry in a negative way. TAO lost ground every day last week, generating the worst performance, but the overall trend in Chinese shares was lower.
At the time of publication, Dion was long IAU, GDX and GDXJ.
Don Dion is president and founder of
, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.